All that glitters isn't gold

Last updated: 18 September 2018

On average, Australian couples will spend $5134 on an engagement ring, according to the 2018 Australian Wedding Industry Report, but it's nearly impossible for most of us to judge the real value of a diamond.

Without expert understanding of diamonds, synthetics and simulants, you might find you're paying too much for a stone which isn't what you think it is. See our guide to lab-grown diamonds if you're interested in these.

Ask questions – a good jeweller will spend some time with you and help you find a diamond you like that's in your price range.

Specifically ask if the diamond has been treated. The Gemological Institute of America (GIA) says a relatively small percentage of gem-quality diamonds are treated for two reasons: to improve clarity or to alter colour. But advanced treatment technologies are difficult to detect and require sophisticated instruments, so it's best to ask for a diamond that's been graded by GIA or another reputable lab such as Sydney's Gem Studies Laboratory (the Gemmological Association of Australia's endorsed diamond grading lab). It's worth knowing if the diamond has been treated as some treatments (colour coating) can wear off while others (laser drilling) can weaken the stone. Plus, treatments to turn a clear diamond into a 'fancy' colour may elevate the price and potentially be deceptive if not disclosed.

Examine the diamond in good light.

If you're looking for a diamond of 0.5 carat or more, ask for a grading certificate from an independent laboratory. A reputable jeweller sells stones with genuine Diamond Grading Reports or Certificates, says DCLA (Diamond Certification Laboratory of Australia).

Shop around – different stores sometimes price similar stones very differently.

Once you pay a deposit, ask for a detailed receipt describing the characteristics of the diamond and any associated piece of jewellery.

Get a valuation certificate from a valuer registered with the National Council of Jewellery Valuers. Valuations start from about $50, though some valuers charge a percentage rate attached to the final valuation price. Call ahead of time to agree on the cost.

Dodgy diamonds

Take your business elsewhere if:

the salesperson tells you you're getting a huge discount on the stated value of the stone

their prices are just too cheap to be true, and no reliable certification is available

The 2006 movie Blood Diamond drew attention to the role diamonds have played in human rights abuses and wars. 'Conflict diamonds' were sold to help fund wars in Sierra Leone, Angola and the Democratic Republic of Congo, which killed an estimated 3.7 million people. Today, conflict diamonds from Liberia and rebel-held areas in Cote d'Ivoire are still finding their way to the international diamond market.

In 2003,the international Kimberley Process Certification Scheme was launched to end the trade in conflict diamonds, and fortunately for Aussie consumers, Australia participates in the scheme.

The World Diamond Council says that trade in conflict diamonds has fallen considerably. From approximately four percent in the late 1990s (as a percentage of the annual quantity of natural diamond production) the trade has been virtually eliminated through the efforts of the Kimberley Process participants and adherence to warranties and monitoring.

Ask your jeweller for a copy of their company's policy on conflict diamonds before you buy a single carat from them – any jeweller worth their salt can guarantee their diamonds are conflict-free.

Exploitation of workers and local communities in the precious stone industry is a contentious issue. It's difficult to find recent, verifiable statistics about labour conditions and pay rates across the different countries where diamonds are mined, but many human rights groups say that diamond miners (including children and sometimes workers in forced labour situations) are often paid poorly for backbreaking work which can be incredibly dangerous.

Human Rights Watch recently surveyed some of the world's best-known jewellery brands and found that while some companies are actively working to identify and address human rights risks in their supply chains, others rely on the assurances of their suppliers that their gold and diamonds are free of human rights abuses. "Some have made no commitments to responsible sourcing at all. Almost none can identify the specific mines where all of their gold and diamonds originate," a recent Human Rights Watch report said.

Fair trade standards are in development, and if you agree that it's high time profits from diamonds filtered down to workers in countries they've helped devastate, ask for any additional documentation around fair trade diamonds that your diamond seller may be able to provide.

The four Cs

You may have heard of the four Cs, especially if you've already started looking for an engagement ring. They're a set of criteria that help determine the value of a diamond and they include carat, cut, clarity and colour.

Carat

One carat equals 0.2g and is subdivided into 100 points. However, small weight differences undetectable to the eye (between 0.99 and 1 carat, or 0.74 and 0.75 carat, for example) can make a large difference to the stone's value.

But weight isn't the only factor. A smaller high-quality diamond may be worth more than a larger one of lesser quality.

Cut

Diamonds are available in all kinds of cuts – brilliant (round), marquise (pointed oval) and princess (square) are just three possibilities, and refer to the shape that the raw diamond has been cut into. Look at examples and decide which you prefer, remembering that the better the standard of cut and quality of the finish, the better the brilliance and fire (brightness and sparkle) of the diamond.

Clarity

Diamonds were formed millions of years ago through pressure and heat, so most contain imperfections or foreign material such as other stones or minerals called inclusions. A diamond's clarity grading tells you if inclusions are present. There are different grading systems, usually ranging from flawless (loupe-clear) to a small inclusion only seen through a 10x loupe (VS1), right through to those visible to the naked eye (I3 or P3)

Obviously, the fewer inclusions, the higher the grading and the more expensive the stone.

Colour

A perfect diamond is colourless, but most have a hint of yellow or even brown in them, which results in a lower grading ranging from D (exceptional white+) down to Z (tinted, usually yellow). However, very rare pink diamonds (mainly from the Argyle mine in Western Australia) and 'fancy coloured' diamonds, like canary yellow, can be very valuable.

Diamonds can be treated to improve their appearance. Treatments include artificial colouring, laser drilling to remove inclusions and fracture filling to conceal cracks. When a diamond is treated it's considered less rare and is viewed as an inferior product to a natural, untreated stone of similar specifications. Consequently it's much less valuable.

Can man-made be as good as natural?

Synthetic diamonds (created in labs in a matter of weeks) and even imitation diamonds are readily available, and while some man-made stones are just as beautiful as naturally occurring diamonds, they're much less valuable than the real thing. The way to make sure you're getting what you paid for is certification – sometimes called the fifth C. A grading certificate from an independent laboratory exactly describes the characteristics of the stone.

Certification is usually done before setting the stone, so if the diamond is already mounted, it'll need to be taken out before it can be certified.

Cost

There's a great deal of variation when it comes to the price of a diamond. How much your rock will cost you depends on the size, the cut, the origin of the diamond, whether or not it has any inclusions or irregularities, as well as a number of other factors. Do your research, shop around, and remember that if a deal seems too good to be true, it almost certainly is.